The first authenticated European exploration of the region comprising present-day South Dakota was made by François and Louis Joseph de La Vérendrye, sons of the French Canadian explorer Pierre Gaultier de Verennes, sieur de La Vérendrye, in 1743. In 1803 territory now occupied by the Dakotas became part of the United States as a result of the Louisiana Purchase. The Lewis and Clark expedition passed through the region in 1804 and in 1806.

The first permanent settlement of non-Native Americans in South Dakota was established in 1817 opposite the site of modern Pierre. In 1849 the region east of the Missouri River became part of the territory of Minnesota, and in 1854 the region west of the river became part of the territory of Nebraska. Settlement of the region was slow until 1874, when gold was found in the Black Hills, in the Sioux reservation, and large numbers of whites began to flock to the region, hoping to strike it rich. The federal government halted the settlers and tried to keep them out of the Black Hills until an agreement could be reached with the Sioux.

The Great Dakota Boom, a period of rapid settlement, occurred between 1879 and 1886. A statehood movement began, and in 1889 the Dakotas were separated. On November 2, 1889, South Dakota was admitted to the Union as a state; Pierre was made the capital.

South Dakota was beset by repeated and long-lasting droughts and the state's farming economy suffered greatly during the next few decades. The problem was alleviated in the 1940s by the construction of large dams on the Missouri River. With increased farm mechanization came unemployment, however, and many young people left the state. Dozens of community development groups were formed in the 1960s to attract new industry in the hopes of reversing this trend.

Mining first became important in the 1870s with the discovery of the Homestake Lode in the Black Hills. Although manufacturing has increased in importance, it is largely dominated by the processing of primary products, such as foodstuffs and lumber. Tourism and other service industries, transportation, and commerce also play important parts in the state's economy.

About 61 percent of the state's yearly farm income is derived from sales of livestock and livestock products. Beef cattle, hogs, milk, and sheep and lambs account for almost all of this. Cattle and sheep are raised primarily in the west. Hog raising is concentrated in the southeast, and dairy farming is important in the east. The main crops farmed in the state are wheat, corn, and hay (alfalfa).

The principal industry is the manufacture of food products. Other manufactures include industrial machinery, lumber and wood products, electronic goods, metal items, precision instruments, and transportation equipment.

The statewide sales tax is 4 percent, with local options for an additional 1 to 2 percent. There is an additional statewide sales tax of 1 percent on accommodations and admissions to attractions and special events. Certain localities my impose another 1 percent on lodgings, admissions, food and alcoholic beverages.

South Dakota's lakes, hills, and parks offer ample opportunities for hunting, fishing, hiking, swimming, boating, horseback riding, golf, skiing, and snowmobiling. The state's two major recreational areas are the Black Hills, in the west, and the Lake Region, in the northeast.